$//Denial of Community Cablevision Company ADI Modification Petition, DA-95-554//$ $/76.59 Modification of television markets/$ $/300.534 Carriage of local commercial television signals/$ $///DA 95-554 3/21/95///$ ///newjob/// Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 DA-95-554 In Re ) ) COMMUNITY CABLEVISION COMPANY d/b/a ) CSR-3865-A DIMENSION CABLE SERVICES ) Los Angeles, California ) ) Petition for Modification of ) Los Angeles ADI ) MEMORANDUM OPINION AND ORDER Adopted: March 20, 1995 Released:March 24, 1995 By the Cable Services Bureau: INTRODUCTION 1. Community Cablevision Company ("CCC"), d/b/a Dimension Cable Services ("Dimension"), operator of a cable television system serving portions of Los Angeles, California, has filed the captioned petition for special relief. CCC requests that its cable system in the Los Angeles ADI be exempted from the Commission's rules governing the number of eligible broadcast stations that must be carried on the system, (i.e., 47 C.F.R.  76.56(a)(1)(iii), 76.56(b)(2)), or, that CCC be granted a limited waiver of the rules until CCC completes its system rebuild, and that it should not be required to carry any more local commercial or noncommercial stations than the system is currently carrying. Alternatively, CCC requests that the communities served by Dimension be excluded, for purposes of the must-carry rules, from the television markets of those commercial stations that Dimension would otherwise potentially be required to carry, and that the noncommercial stations Dimension would otherwise potentially be required to carry be deemed nonlocal as to those communities. On June 23, 1993, Trinity Christian Center of Santa Ana, Inc., d/b/a Trinity Broadcasting Network ("Trinity"), licensee of KTBN-TV, Santa Ana, California, filed an opposition to CCC's petition. An opposition was also filed, on July 22, 1993, by KMEX License Partnership, G.P. ("KMEX"), licensee of KMEX-TV, Los Angeles, California. On September 9, 1993, Rancho Palos Verdes Broadcasters, Inc. ("RPV"), permittee of KRPA- TV, Rancho Palos Verdes, California, also filed an opposition. On September 17, 1993, CCC filed a response to RPV's opposition. On January 5, 1994, KSLS, Inc. ("KSLS"), licensee of station KSCI-TV, San Bernardino, California, filed an opposition. BACKGROUND 2. Pursuant to Section 4 of the Cable Television Consumer Protection and Competition Act of 1992 ["1992 Cable Act"] and implementing rules adopted by the Commission in its Report and Order in MM Docket 92-259, a commercial television broadcast station is entitled to assert mandatory carriage rights on cable systems located within the station's market. A station's market for this purpose is its "area of dominant influence," or ADI, as defined by the Arbitron audience research organization. An ADI is a geographic market designation that defines each television market exclusive of others, based on measured viewing patterns. Essentially, each county in the United States is allocated to a market based on which home-market stations receive a preponderance of total viewing hours in the county. For purposes of this calculation, both over-the-air and cable television viewing are included. 3. This section of the 1992 Cable Act also provides that the Commission may: with respect to a particular television broadcast station, include additional communities within its television market or exclude communities from such station's television market to better effectuate the purposes of this section. In considering such requests, the 1992 Cable Act provides that: the Commission shall afford particular attention to the value of localism by taking into account such factors as-- (I) whether the station, or other stations located in the same area, have been historically carried on the cable system or systems within such community; (II) whether the television station provides coverage or other local service to such community; (III) whether any other television station that is eligible to be carried by a cable system in such community in fulfillment of the requirements of this section provides news coverage of issues of concern to such community or provides carriage or coverage of sporting and other events of interest to the community; and (IV) evidence of viewing patterns in cable and noncable households within the areas served by the cable system or systems in such community. 4. The legislative history of this provision indicates that: where the presumption in favor of ADI carriage would result in cable subscribers losing access to local stations because they are outside the ADI in which a local cable system operates, the FCC may make an adjustment to include or exclude particular communities from a television station's market consistent with Congress' objective to ensure that television stations be carried in the areas which they serve and which form their economic market. * * * * * [This subsection] establishes certain criteria which the Commission shall consider in acting on requests to modify the geographic area in which stations have signal carriage rights. These factors are not intended to be exclusive, but may be used to demonstrate that a community is part of a particular station's market. 5. The Commission provided guidance in MM Docket 92-259, supra, to aid decision making in these matters, as follows: For example, the historical carriage of the station could be illustrated by the submission of documents listing the cable system's channel line-up (e.g., rate cards) for a period of years. To show that the station provides coverage or other local service to the cable community (factor 2), parties may demonstrate that the station places at least a Grade B coverage contour over the cable community or is located close to the community in terms of mileage. Coverage of news or other programming of interest to the community could be demonstrated by program logs or other descriptions of local program offerings. The final factor concerns viewing patterns in the cable community in cable and noncable homes. Audience data clearly provide appropriate evidence about this factor. In this regard, we note that surveys such as those used to demonstrate significantly viewed status could be useful. However, since this factor requires us to evaluate viewing on a community basis for cable and noncable homes, and significantly viewed surveys typically measure viewing only in noncable households, such surveys may need to be supplemented with additional data concerning viewing in cable homes. 6. In adopting rules to implement this provision, the Commission indicated that changes requested should be considered on a community-by-community basis rather than on a county-by-county basis, and that they should be treated as specific to particular stations rather than applicable in common to all stations in the market. The rules further provide, in accordance with the requirements of the 1992 Cable Act, that a station not be deleted from carriage during the pendency of an ADI change request. MARKET FACTS AND ARGUMENTS OF THE PARTIES 7. According to CCC, Dimension serves 42,292 customers in the cities of Newport Beach, Irvine, Tustin, and Orange, California; the University of California, Irvine; and the Marine Corps Air Stations in Tustin and El Toro, all of which are located in Orange County in the southwestern portion of the Los Angeles ADI. Dimension states that it carries eight and one-half local commercial stations and two local noncommercial educational stations, and that under the must-carry rules it is required to add four and one-half commercial broadcast signals and possibly up to three more noncommercial stations. CCC claims that, in order to accommodate these must-carry channels, Dimension will have to delete or reduce more popular national cable network programming, both entertainment programming and news and public affairs, "the core of speech protected by the First Amendment," as well as reduce community affairs information carried on the local origination channel, "all to the dissatisfaction of the overwhelming majority of Dimension's subscribers." CCC claims that Dimension will be forced to delete The Movie Channel and Continuous Hits 1, and to reduce to part-time carriage a number of public service oriented programming, such as the local origination channel, C-SPAN, and The Weather Channel, as well as other entertainment programming. 8. In support of its petition, CCC has submitted results of consumer surveys it conducted in the relevant cable market designed to "measure the desirability to its subscribers of the four and one-half signals (KMEX, KSCI, KTBN, KVEA, and KWHY) that it currently plans to add to fulfill its must-carry obligations." CCC claims that the results of the surveys show a very low interest in these signals, especially in comparison with the cable programming that they would displace. According to CCC, to its knowledge, none of these stations has sizable off-air viewership within the communities served by Dimension, none is significantly viewed, and none has been historically carried on Dimension's cable system. CCC argues that, since Dimension is currently carrying local programming, in addition to the local programming available on the eight and one-half local commercial and two local noncommercial educational stations, there is ample opportunity for subscribers to have access to a very wide variety of local programming. CCC believes that by granting the relief requested, the Commission would be furthering the goals of Congress in the 1992 Cable Act by promoting the availability of a diversity of views and information, citing Section 2(b) of the Cable Act. 9. CCC also argues that, as applied to this case, the must-carry rules "inhibit the exercise by Dimension of editorial discretion consistent with its status as a First Amendment- protected speaker." According to CCC, [b]ecause carriage of the broadcast stations in question on Dimension's system would not further the goal of increasing programming of truly local concern and interest to the vast majority of Dimension's audience, and will reduce the amount of national news and public affairs programming and local community affairs and weather information available to Dimension's subscribers, there is no reason to interfere with Dimension's First Amendment rights by requiring Dimension to carry the speech of these must-carry stations. CCC maintains that, because there is no compelling or substantial state interest in limiting Dimension's speech, there can be no justification for applying the must-carry rules in this instance. 10. CCC also claims that the must-carry obligations are particularly onerous in large television markets such as the Los Angeles ADI, especially for systems, such as Dimension's, with channel capacities of "just barely over the 37 channel threshold requiring carriage of all nonduplicative noncommercial stations that request carriage." CCC states that the Los Angeles ADI contains 21 commercial broadcast stations and five noncommercial educational stations, and that Dimension would potentially be required to carry three more noncommercial stations and to set aside 13 channels for carriage of qualified commercial stations. Because it would be deprived of nearly 50% of its channel capacity (and even more once its leased access, and public, educational, and governmental access requirements are considered) before it has the opportunity to exercise any editorial discretion over how best to serve the needs of its subscribers, CCC believes that the must-carry rules as applied in this instance are inconsistent with the First Amendment. 11. In its opposition, Trinity first disputes CCC's argument that its First Amendment rights have been infringed. Trinity notes that in Turner Broadcasting System, Inc. v. FCC, 819 F.Supp. 32 (D.D.C. 1993), the court upheld the Cable Act against near identical constitutional arguments, stating that "the must carry provisions are essentially economic regulation designed to create competitive balance in the video industry as a whole, and to redress the effects of cable operators' anti-competitive practices." Id. at 40. Specifically, notes Trinity, in Orange County, Dimension's monopoly power prevents KTBN-TV from reaching the majority of KTBN-TV's community of license, Santa Ana, because over 50% of the television households in Santa Ana have cable service, and when the cable goes in, the consumer's receive antenna is removed or disabled. Trinity also points out that the programming that Dimension wishes to continue is The Movie Channel and Continuous Hits 1, which channels do not provide unique programming of local interest and concern. Further, the five signals that Dimension would add upon deletion of these services (KTBN, KSCI, KWHY, KMEX, and KVEA) are diverse and would increase the quantity of services and speech available to the public. 12. Trinity also criticizes CCC's use of the survey results as evidence in support of its petition. First, Trinity points out that KWHY, a station devoted to business information, was not included in the survey. Further, KRCA-TV, despite receiving the lowest ratings in the survey, will be carried, while KTBN-TV, with higher results, will not be carried. 13. Trinity maintains that Dimension's claims that denial of its request would injure its right to communicate under the constitution is counter-balanced by the individual stations' corresponding right to communicate as guaranteed by the Cable Act. Because interference with statutorily protected rights of expression constitutes irreparable injury, argues Trinity, granting CCC's requested relief would cause irreparable injury to KTBN- TV. 14. In its opposition, KMEX first notes that nothing in the Communications Act permits the Commission to exempt CCC from the rules or to grant it a waiver. Further, KMEX argues that, under its alternative proposal, CCC would discriminate against KMEX by excluding KMEX from carriage on its system while continuing to carry other stations licensed to the same Los Angeles community. KMEX maintains that this discrimination is especially troublesome because KMEX is a Spanish-language station that serves a substantial minority Hispanic population. In addition, argues KMEX, CCC's "minimal showing is far from adequate to warrant denial of must carry status to KMEX under the criteria enumerated in the Commission's Report and Order." 15. In its opposition, RPV explains that, as it is not yet on the air, it is not yet in a position to demand carriage on Dimension's cable system. RPV does oppose, however, CCC's attempt to keep KMEX-TV off the system and objects to CCC's "anti-minority attitude." In its response, CCC claims that RPV's opposition provides no new information, improperly mischaracterizes CCC's accurate use of data, and objects to RPV's baseless accusations of racism. 16. In its opposition, KSLS argues that the Commission lacks authority to exempt cable systems from the statutory requirement that it carry up to one-third of its capacity with local commercial stations. KSLS also argues that CCC has failed to show that compliance with its must carry obligations would result in hardship, and that, in any case, a showing of hardship is irrelevant. ANALYSIS AND DECISION 17. First, we will deny CCC's request for a waiver or an exemption. Whereas the Commission may waive its rules, it may not generally waive a provision of the statute. CCC has not set forth arguments here justifiying such an action with specific citations to the applicable statutory provisions and judicial precedents. We also note that the constitutionality of the must-carry rules was upheld by a special three-judge panel of the District Court for the District of Columbia. On appeal, the Supreme Court vacated the decision and remended the case back to the District Court for further proceedings. While the case is pending, the must-carry provisions of the 1992 Cable Act remain in effect, as do the Commission's must- carry rules. Because this issue is currently being resolved by the court, no challenge to the constitutionality of these rules is appropriate here. 18. With respect to CCC's request for modification of the Los Angeles ADI, we find that CCC has provided insufficient evidence to support granting that request. The Cable Act allows the Commission to include or exclude particular communities from a television station's market to ensure that a television station is carried in the areas which it serves and which form its economic market. In the Report and Order, the Commission noted that it would permit joint filings by a group of stations or a single request from a cable operator for changes for more than one station licensed to the same community, "as long as the submitted information demonstrates that each station is entitled to have its market modified." CCC has failed to provide documented evidence regarding each particular television station for which it requests a market modification. CCC merely states that "to its knowledge" none of the stations had been historically carried on Dimension's cable system. Further, CCC does not even maintain that the listed stations do not provide coverage or other local service to their communities, but rather merely complains that it will have to delete cable programming that, according to CCC, provides public affairs and news programs, and will have to reduce community affairs information carried on the local origination channel. With respect to evidence of viewing patterns in cable and noncable households in the cable communities, CCC has not provided the Commission with any information, other than that, again, "to its knowledge" none of the stations has sizable off-air viewership within the communities served by Dimension and that none is significantly viewed. ORDER 19. In view of the foregoing, we find that grant of the petition is not in the public interest. 20. Accordingly, it IS ORDERED, pursuant to Section 614(h) of the Communications Act of 1934, as amended, 47 U.S.C.  534, and Section 76.59 of the Commission's Rules, 47 C.F.R.  76.59, that the captioned petition for special relief filed on June 2, 1993 by Community Cablevision Company d/b/a Dimension Cable Services IS DENIED. Its petitions having been denied, CCC shall comply with the applicable provisions of the Section 614 of the Communications Act and the associated rules within sixty (60) days of the release of this Order. CCC shall also notify all of the stations listed in its Petition of the outcome of this decision within fifteen (15) days of the release of this Order. 21. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau